Debt Recover Procedures for Strata

What happens when not only one or two but six lots fall behind on their strata levy fees? Do the rest of the owners need to pay?

Unfortunately, many strata schemes have difficulty with one or two owners that are behind in paying their levies. This is normal, however 6 owners in a small building is unusual.

Good strata managers will follow-up up levies promptly, especially if they are in arrears. This is why it is so important to appoint a strata manager who has strong processes around debt collection, with reminder letters to be issued against owners in arrears followed then by recovery action against any owners who fail to pay their levies after receiving reminders.

However, an owners corporation may raise special levies at a General Meeting for a number of purposes including a shortfall of funds due to owners not paying their levies. A short term special levy may be required at a building to ensure that the Owners Corporation can continue to operate whilst the outstanding levies are being recovered.

It is not recommended not to pay this special levy as it may end up in litigation to recover outstanding amounts. It is wise to assist your owners corporation even though it may seem unfair.

Make sure you ask your strata manager to send you a copy of the levy collection process and policy as this may require improvement to avoid such a situation.